Expanding Broadcast Ownership Opportunities Act of 2019
This bill requires the Federal Communications Commission (FCC) to increase diversity of ownership in the broadcasting industry.
Specifically, the bill allows companies engaged in the qualifying sale of a broadcast station to receive favorable tax treatment by electing nonrecognition of the gain or loss resulting from the sale. To qualify for this treatment, the sale must result in or preserve ownership of a broadcast station by socially disadvantaged individuals.
The bill also requires the FCC to foster investment in broadcast stations owned by socially disadvantaged individuals.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3957 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 3957
To direct the Federal Communications Commission to take certain actions
to increase diversity of ownership in the broadcasting industry, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 25, 2019
Mr. Butterfield (for himself, Ms. Clarke of New York, Mr. Cardenas, Mr.
Rush, Mr. Veasey, and Mr. Hastings) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committee on Ways and Means, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To direct the Federal Communications Commission to take certain actions
to increase diversity of ownership in the broadcasting industry, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding Broadcast Ownership
Opportunities Act of 2019''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) One of the main missions of the Federal Communications
Commission, and a compelling governmental interest, is to
ensure that there is a diversity of ownership and viewpoints in
the broadcasting industry.
(2) The Commission should continue to collect relevant data
and conduct studies on such diversity and make appropriate
recommendations to Congress on how to increase the number of
minority- and women-owned broadcast stations.
(3) Data from 2014 shows that, of the over 1,700 commercial
broadcast television stations in the United States, less than 6
percent are owned by women, and less than 3 percent are
minority-owned. With respect to radio stations, women owned
approximately 7 percent of FM broadcast radio stations, and
minorities owned less than 3 percent of such stations.
(4) Women and minority ownership is 5 to 10 times higher in
other industries than in the broadcasting industry.
(5) During the 17 years that a minority tax certificate
program was in place at the Commission (from 1978 to 1995), the
Commission issued 287 certificates for radio stations and 40
certificates for television stations.
(6) The Commission can also support minority- and women-
owned entrants into the broadcasting industry by implementing
an incubator program in which existing licensees assist new
entrants in the operation of broadcast stations.
SEC. 3. FCC REPORTS TO CONGRESS.
(a) Biennial Report Containing Recommendations for Increasing
Number of Minority- and Women-Owned Broadcast Stations.--Not later than
180 days after the date of the enactment of this Act, and not less
frequently than every 2 years thereafter, the Commission shall submit
to Congress a report containing recommendations for how to increase the
total number of broadcast stations that are owned or controlled by
members of minority groups or women, or by both members of minority
groups and women.
(b) Biennial Report on Number of Minority- and Women-Owned
Broadcast Stations.--Not later than 180 days after the date of the
enactment of this Act, and not less frequently than every 2 years
thereafter, the Commission shall submit to Congress a report that
states the total number of broadcast stations that are owned or
controlled by members of minority groups or women, or by both members
of minority groups and women, based on data reported to the Commission
on Form 323.
SEC. 4. TAX CERTIFICATE PROGRAM FOR BROADCAST STATION TRANSACTIONS
FURTHERING OWNERSHIP BY SOCIALLY DISADVANTAGED
INDIVIDUALS.
(a) Requirements for Issuance of Certificate by FCC.--
(1) In general.--Part I of title III of the Communications
Act of 1934 (47 U.S.C. 301 et seq.) is amended by adding at the
end the following:
``SEC. 344. TAX CERTIFICATE PROGRAM FOR BROADCAST STATION TRANSACTIONS
FURTHERING OWNERSHIP BY SOCIALLY DISADVANTAGED
INDIVIDUALS.
``(a) Issuance of Certificate by Commission.--Upon application by a
person who engages in a sale of an interest in a broadcast station
described in subsection (b), subject to the rules adopted by the
Commission under subsection (c), the Commission shall issue to such
person a certificate stating that such sale meets the requirements of
this section.
``(b) Sales Described.--The sales described in this subsection are
the following:
``(1) Sale resulting in or preserving ownership by socially
disadvantaged individuals.--A sale of an interest in a
broadcast station if, immediately following the sale, the
station is owned by socially disadvantaged individuals
(regardless of whether the station was owned by socially
disadvantaged individuals before the sale).
``(2) Sale by investor in station owned by socially
disadvantaged individuals.--In the case of a person who has
contributed capital in exchange for an interest in a broadcast
station that is owned by socially disadvantaged individuals, a
sale by such person of some or all of such interest.
``(c) Rules.--The Commission shall adopt rules for the issuance of
a certificate under subsection (a) that provide for the following:
``(1) Limit on value of sale.--A limit on the value of an
interest the sale of which qualifies for the issuance of such a
certificate. The limit shall be no lower than $10,000,000 and
no higher than $50,000,000.
``(2) Minimum holding period.--In the case of a sale
described in subsection (b)(1), a minimum period following the
sale during which the broadcast station must remain owned by
socially disadvantaged individuals. The minimum period shall be
no longer than 3 years.
``(3) Cumulative limit on number or value of sales.--A
limit on the total number of sales or the total value of sales,
or both, for which a person may be issued certificates under
subsection (a).
``(4) Participation in station management by socially
disadvantaged individuals.--Requirements for participation by
socially disadvantaged individuals in the management of the
broadcast station.
``(d) Annual Report to Congress.--The Commission shall submit to
Congress an annual report describing the sales for which certificates
have been issued under subsection (a) during the period covered by the
report.
``(e) Definitions.--In this section:
``(1) Owned by socially disadvantaged individuals.--The
term `owned by socially disadvantaged individuals' means, with
respect to a broadcast station, that--
``(A) such station is at least 51 percent owned by
one or more socially disadvantaged individuals, or, in
the case of any publicly owned broadcast station, at
least 51 percent of the stock of such station is owned
by one or more socially disadvantaged individuals; and
``(B) the management and daily business operations
of such station are controlled by one or more of such
individuals.
``(2) Socially disadvantaged individual.--The term
`socially disadvantaged individual' means a woman or an
individual who has been subjected to racial or ethnic prejudice
or cultural bias because of the identity of the individual as a
member of a group without regard to the individual qualities of
the individual.''.
(2) Deadline for adoption of rules.--The Commission shall
adopt rules to implement section 344 of the Communications Act
of 1934, as added by paragraph (1), not later than 1 year after
the date of the enactment of this Act.
(3) Report to congress on program expansion.--Not later
than 6 years after the date of the enactment of this Act, the
Commission shall submit to Congress a report regarding whether
Congress should expand section 344 of the Communications Act of
1934, as added by paragraph (1), beyond broadcast stations to
cover other entities regulated by the Commission.
(4) Examination and report to congress on nexus between
diversity of ownership and diversity of viewpoint.--
(A) Examination.--Not later than 60 days after the
date of the enactment of this Act, the Commission shall
initiate an examination of whether there is a nexus
between diversity of ownership or control of broadcast
stations (including ownership or control by members of
minority groups or women, or by both members of
minority groups and women) and diversity of the
viewpoints expressed in the matter broadcast by
broadcast stations.
(B) Report to congress.--Not later than 2 years
after the date of the enactment of this Act, the
Commission shall submit to Congress a report on the
findings of the Commission in the examination under
subparagraph (A), including supporting data.
(b) Nonrecognition of Gain or Loss for Tax Purposes.--
(1) In general.--Subchapter O of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after part IV the
following new part:
``PART V--SALE OF INTEREST IN CERTAIN BROADCAST STATIONS
``SEC. 1071. NONRECOGNITION OF GAIN OR LOSS FROM SALE OF INTEREST IN
CERTAIN BROADCAST STATIONS.
``(a) Nonrecognition of Gain or Loss.--If a sale of an interest in
a broadcast station, within the meaning of section 344 of the
Communications Act of 1934, is certified by the Federal Communications
Commission under such section, such sale shall, if the taxpayer so
elects, be treated as an involuntary conversion of such property within
the meaning of section 1033. For purposes of such section as made
applicable by the provisions of this section, stock of a corporation
operating a broadcast station shall be treated as property similar or
related in service or use to the property so converted. The part of the
gain, if any, on such sale to which section 1033 is not applied shall
nevertheless not be recognized, if the taxpayer so elects, to the
extent that it is applied to reduce the basis for determining gain or
loss on any such sale, of a character subject to the allowance for
depreciation under section 167, remaining in the hands of the taxpayer
immediately after the sale, or acquired in the same taxable year. The
manner and amount of such reduction shall be determined under
regulations prescribed by the Secretary. Any election made by the
taxpayer under this section shall be made by a statement to that effect
in his return for the taxable year in which the sale takes place, and
such election shall be binding for the taxable year and all subsequent
taxable years.
``(b) Minimum Holding Period; Continued Management.--If--
``(1) there is nonrecognition of gain or loss to a taxpayer
under this section with respect to a sale of property
(determined without regard to this paragraph), and
``(2) the taxpayer ceases to fulfill any requirements of
the rules adopted by the Federal Communications Commission
under paragraph (2) or (4) of section 344(c) of the
Communications Act of 1934 (as such rules are in effect on the
date of such sale),
there shall be no nonrecognition of gain or loss under this section to
the taxpayer with respect to such sale, except that any gain or loss
recognized by the taxpayer by reason of this subsection shall be taken
into account as of the date on which the taxpayer so ceases to fulfill
such requirements.
``(c) Basis.--For basis of property acquired on a sale treated as
an involuntary conversion under subsection (a), see section 1033(b).''.
(2) Clerical amendment.--The table of parts for subchapter
O of chapter 1 of the Internal Revenue Code of 1986 is amended
by inserting after the item related to part IV the following
new part:
``Part V--Sale of Interest in Certain Broadcast Stations
``Section 1071. Nonrecognition of gain or loss from sale of interest in
certain broadcast stations.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to sales of interests in broadcast stations after
the date that is 1 year after the date of the enactment of this Act.
(d) Sunset.--The amendments made by this section shall not apply
with respect to sales of interests in broadcast stations after the date
that is 16 years after the date of the enactment of this Act.
SEC. 5. INCUBATOR PROGRAM.
Not later than 180 days after the date of the enactment of this
Act, the Commission shall amend its Report and Order in the matter of
rules and policies to promote new entry and ownership diversity in the
broadcasting services, MB Docket No. 17-289, FCC 18-114, adopted on
August 2, 2018, to do the following:
(1) Expand the incubator program provided for in such
Report and Order to permit a licensee to provide financial
support or operational support, or both, to a qualifying
incubated entity that owns or wants to own a television
broadcast station.
(2) Expand the eligibility criteria for an incubated entity
under such program to include broadcast stations owned by
socially disadvantaged individuals.
SEC. 6. DEFINITIONS.
In this Act:
(1) Broadcast station.--The term ``broadcast station'' has
the meaning given such term in section 3 of the Communications
Act of 1934 (47 U.S.C. 153).
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) Owned by socially disadvantaged individuals.--The term
``owned by socially disadvantaged individuals'' has the meaning
given such term in section 344 of the Communications Act of
1934, as added by section 4.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Communications and Technology.
Subcommittee Consideration and Mark-up Session Held.
Forwarded by Subcommittee to Full Committee by Voice Vote .
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by Voice Vote.
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